View Full Version : The economic hit from snow storms



ou48A
02-13-2011, 11:26 PM
While the article below is about Tulsa and not OKC and the exact circumstance are different itís still a fairly clear indicator of the significant financial hit that our recent snow storms have caused. Itís important to note that the $75 million dollar per day hit in Tulsa was to corporate losses only. The actual losses to their total economy are likely much higher.

Clearly the impact of the storms cannot be entirely done away with, but itís just as clear that a snow storms total impact could be significantly reduced for comparatively little money. If a much better effort had been made to plow our roads business could have gotten back to normal quicker and the financial hit to the tax base would be much less.

I believe that OKC and sounding city governments should study their needs of additional snow removal equipment including plows, big V snow plow blades for maintainers, fitting of some sanitation trucks with quick hitch plows and snow melting machines for down town OKC. It appears that all of this would easily pay for its self after one major snow event.

The article doesnít even talk about the damage done to roads by leaving the snow on the road and it doesnít talk about the delay to emergency services and the damage caused in this area.

Officials like to talk about being storm ready but with the response we have seen in the past 14 or so months to snow storms makes it abundantly clear that our entire area is not as snow storm ready as it needs to be.

http://www.tulsaworld.com/business/article.aspx?subjectid=46&articleid=20110213_46_E1_CUTLIN923854

Published: 2/13/2011 2:30 AM

Financial blow may be as big as storms



Residents of northeast Oklahoma will long remember the twin winter storms of 2011. But for area businesses, the impact from the heavy snowfalls also may linger on their bottom lines.

The Feb. 1 blizzard and a storm last week shut down many operations and hindered others. Now as the snow melts, those businesses are hoping to make up the losses, although not all are confident they will be able to do so.

Most companies were reluctant when interviewed to put a dollar figure on the cost of the storm. Still, it was evident from a survey by the Tulsa Metro Chamber that the amounts will be significant.

Businesses that responded anonymously in the chamber survey listed losses anywhere from a few hundred dollars to more than $600,000. Overall, the chamber estimates corporate losses at $75 million a day in Tulsa alone.

"No sales means no profits," one company leader wrote, while another called the storms a "nightmare" and said his business would be lucky to survive the events.

The area's transportation and aerospace industries may have taken the biggest hits simply because of how they do business and their size in the local economy, industry officials said.

Melton Truck Lines Inc., the Tulsa-based flatbed carrier that operates in 48 states and Mexico, is accustomed to winter conditions in its service areas, but the blizzard that dumped 14 inches of snow on Tulsa stretched across many states in which Melton does business east of the Mississippi River as well.

Melton employs 900 drivers.
"We will lose or have lost a reasonable amount of business, but we will pick up business and move forward," said Melton President Bob Peterson. "Our customers had orders, and they will be delayed. But we didn't have any bad accidents or crashes, and nobody was hurt."

At the NORDAM Group, the aerospace manufacturer that employs 1,500 people in Tulsa, the saving grace of the storm's impact were the early forecasts of the storm's expected severity, said President Meredith Siegfried.

"They gave us an unusual amount of time to weigh the situation and make good decisions," Siegfried said. "The majority of our stakeholders would face hazardous driving conditions and very many would not have trucks or SUVs."

So NORDAM executives decided to close several of its Tulsa plants Feb. 1 and 2.
Siegfried and other NORDAM managers drove travel routes, monitored company facilities, and checked on some employees who were particularly affected by the
weather.

Closing cost the company a good deal of revenue, and the cleanup was expensive as well, but Siegfried said she felt good about the decision.

The storm also caused Spirit AeroSystems Inc. to close its aerospace component manufacturing plant at 3330 N. Mingo Road during the blizzard - the first time the facility has had an unscheduled shutdown in 32 years, said spokesman Mark Walker. Spirit employs 2,000 workers in Tulsa and 264 in McAlester.
"It was a safety issue," Walker said.

At American Airlines, which was forced to cancel dozens of flights throughout the country as the storm made its way east, the snow also fouled operations at its Tulsa Maintenance & Engineering Center, said American spokesman Ed Martelle.

American employs 6,000 aircraft mechanics and related workgroups and an additional 1,000 administrative, IT and clerical staff at the M&E Center, its largest maintenance base.

Although the base did not shut down completely, its operations were significantly slowed by the storm, Martelle said.
"A lot of people could not get into work," Martelle said. "We did have some slowdown on the "light C" and "heavy C" (periodic aircraft maintenance) checks. A lot of stuff had to be put off."

The hazardous roadways created a first for the 106-year-old Tulsa World. The newspaper was unable to deliver the print edition for three days after the blizzard and made the decision to not print.
"It was a very difficult decision but no weather event has ever had a more significant impact on us," President John Bair said.
"The drifting snow buried delivery trucks and our drivers were unable to get to our downtown facility. Even if we had been able to get the trucks downtown, highways were closed and neighborhoods were worse than we've ever seen."

The newspaper kept readers informed through its website and a free version of its e-edition, which usually is available by subscription.

Some companies that do outdoor fabrication, such as Insulation Specialists Inc. at the Tulsa Port of Catoosa, were still hampered late last week, said Bob Portiss, director of the Tulsa Port of Catoosa.
"They'll have to wait until the snow clears," he said.
Other manufacturers, such as Claremore's Hydrohoist, plan to put in extra hours during the coming weeks to make up for lost production.

HydroHoist President and CEO Mick Webber said the boat float manufacturing company lost five days of work because of the snowstorm, just before the start of the busy boating and recreation season.
"Overtime, a lot of overtime," Webber said when asked about the cost of the storms.
Small service businesses and restaurants were particularly hard-hit.

In Tulsa's Brookside business district, iidentity Salon lost four days of business during the two weeks of snowfall.
Stylists at the salon are struggling to reschedule appointments while co-owner Julie Hudson worries that customers will simply skip this month's hair cuts.
"We had a wedding party last Saturday that just canceled," Hudson said. "They decided they would do their own hair."

Tulsa-based Mazzio's Italian Eatery suffered a double hit as it was forced to close its restaurants and halt its extensive delivery operation, said CEO Greg Lippert.
"It was too dangerous to send our drivers out," he said.

Tulsa malls closed for several days, and even when they did reopen, some tenants opted to stay closed.
Woodland Hills Mall J.C. Penney manager Gary Rowlett said the breaks between the storms were good for store traffic, although sales were still considerably below average.
Tulsa-based convenience store chain QuikTrip earned kudos from customers for staying open during the heavy snow. The determined retailer had to plow parking lots at each of its 68 area stores several times during the storms.

The chain, however, was forced to close its QT Kitchens food preparation center for several days. As a result, it lost thousands of dollars on hot-food sales, said QuikTrip spokesman Mike Thornbrugh.

Reasor's supermarkets, with 15 stores in northeast Oklahoma, saw a considerable increase in revenues as customers were forced to eat more meals at home.

"In terms of volume, we are way up," said Doyle Kirk, vice president of grocery operations for the Tahlequah-based chain, although he said snow-clearing expenses will cut into those profits.


Tulsa Metro Chamber survey of members about 2011 blizzard
Did the storm cause your business to close or cease operations?

Yes.....80%
No.....20%

If you shut down, how long were you closed?

One day.......6%
Two days......31%
Three days......22%
Four days.......22%
Five or more days.......13%
Limited hours......1%
Other........3%

What impact has the snowstorm had on your customer base?

Significant decrease............45%
Slight decrease............21%
No noticeable effect........24%
Slight increase...........1%
Significant increase........2%
Other.........6%

ljbab728
02-13-2011, 11:35 PM
OU, this has been discussed ad infinitum in other threads.

Larry OKC
02-14-2011, 02:59 AM
Interesting as it was last years Christmas storm that ended up being a financial windfall (can't rember if it was City or State, but sales taxes etc were up significantly to a surprise to the powers that be. Increased spending on winter supplies, stocking up on food, eating out, hotels etc. Would think the same would be true now. Seems that when events like this happen, it just shifts when the money is being spent (before hand to stock up) and afterwards too. Reminds me of the various boycotts of businesses for a specific day or weekend, it seems that those that decide to participate, just shift their purchases to before/after the boycott. In the long run, didn't really affect the targeted business.

ou48A
11-14-2011, 09:50 AM
So……. Are we any better prepared to clear snow this winter?
Thanks

demoman
11-14-2011, 10:27 AM
Well they said they went out and did a practice run using some new TRACKING software about a MONTH Ago. I personally think, when they get it down to using Sugar/Beets rather than SALT and sand on the roads they will have an even better clue as to how to get it cleared out and cleaned up.

adaniel
11-14-2011, 11:00 AM
While I've never been terribly impressed with OK's snow/ice removal efforts, its incredibly unreasonable to gauge how they handle snow based off of the two biggest snowstorms in this state's history. In this part of the world by the time most plows or salt trucks are out and going, the sun is usually melting everything.

Statistically speaking we've have a huge snowstorm (10+ inches or more) in this area 3 times since 1889. Why two of those came since 2009, I don't know. I just don't think its a prudent use of tax dollars to plan for something that is so rare.

NYC had a tornado hit Brooklyn back in 2010. Should they install tornado sirens, start requiring tornado saftey training, and start retrofitting their buildings for tornadoes?

ou48A
11-14-2011, 12:11 PM
While serious blizzards are rare events in our area because of the hundreds of millions of dollars lost during each event and because people die being able to clear 90% of the local snow emergency routes within 24 to 48 hours after the event is fairly minimal service.


Most of the needed equipment last for many years and easily pays for its self because a metro area gets back on its feet quicker. Many of the specialty vehicles could be used on other projects during the rest of the year. Many times all that’s needed is the right type of plow.

As seen in the posted article from the Tulsa World the Tulsa chamber of commerce estimates corporate losses at $75 million a day in Tulsa alone.

In the OKC metro area we are probably talking about hundreds of millions of lost money per event. When the tax base takes that big of hit it ripples though the economy and causes corporate cuts (lay offs) and cuts in government services when they are most needed.


Compared to the dollars lost over the life time of the equipment being able to clear 90% of the snow routs in 24 to 48 hours is really a fairly small investment.

Snowman
11-14-2011, 07:56 PM
Interesting as it was last years Christmas storm that ended up being a financial windfall (can't rember if it was City or State, but sales taxes etc were up significantly to a surprise to the powers that be. Increased spending on winter supplies, stocking up on food, eating out, hotels etc. Would think the same would be true now. Seems that when events like this happen, it just shifts when the money is being spent (before hand to stock up) and afterwards too. Reminds me of the various boycotts of businesses for a specific day or weekend, it seems that those that decide to participate, just shift their purchases to before/after the boycott. In the long run, didn't really affect the targeted business.

Due to how taxes are collected is more likely to come out better for the city than for the state. The city collects sales tax which would have mostly just been time shifted, the state would be affected by the losses hitting manufacturing, service, agriculture, etc through lower revenue. It will also depend on other factors too, even with a snowstorm the monthly 2010 numbers should look great compared to monthly 2008 and possibly also 2009 numbers due to the economic fear people had.

ou48A
11-19-2011, 01:05 PM
I would like to know more but this is good news.


"Oklahoma City acquired some new plows, allowing it to better implement snow removal plan this winter, Church said."

Read more: http://newsok.com/central-oklahoma-snow-routes-set-for-winter-2011-2012/article/3624643#ixzz1eBRMgGMo

Larry OKC
11-20-2011, 12:04 AM
^^^
Why has the snow route been REMOVED in front of Deaconess Hospital? If there is a need for an EMERGENCY snow route, one would think in front of a HOSPITAL would be right up there??? They have removed Portland from 39th to NW Expressway (Deaconess is @ NW 54 & Portland)

rcjunkie
11-20-2011, 02:27 PM
^^^
Why has the snow route been REMOVED in front of Deaconess Hospital? If there is a need for an EMERGENCY snow route, one would think in front of a HOSPITAL would be right up there??? They have removed Portland from 39th to NW Expressway (Deaconess is @ NW 54 & Portland)

They don't select streets/snow route by what type of business's are located there, it's done by traffic volume.

ou48A
11-21-2011, 11:49 AM
The up-front cost to remove snow isn’t cheap but along with harm done to commerce leaving snow to repeatedly freeze and thaw causes a great deal of damage to our streets and highways.

We pay for it by increased repairs to our vehicles. Taxes must be raised or dollars diverted. Roads and bridges that are in poor condition cause a certain amount of economic harm on its own.

This is a situation where you can make a relatively small investment now or pay for it in a variety of ways later with a total price tag that’s much higher.

HewenttoJared
11-22-2011, 11:11 AM
Heavy precipitation events are unlikely to decrease any time soon.

ou48A
11-22-2011, 11:24 AM
Heavy precipitation events are unlikely to decrease any time soon.

That’s good because we still haven’t recovered from the record breaking drought that we are still in.
I wonder if we will be breaking the all-time Oklahoma low temp this winter that was set just last winter.

HewenttoJared
11-22-2011, 02:48 PM
Not here, OU. In places that don't need any more.

And there is a difference between increased precipitation and increased heavy precipitations events. A very important and budget-shattering difference.

Larry OKC
11-22-2011, 06:47 PM
They don't select streets/snow route by what type of business's are located there, it's done by traffic volume.

I can appreciate that, but we aren't talking about a business here, we are talking about a hospital....isn't one of the ideas behind an emergency snow route to help you get to...oh...i don't know...a place where they have an emergency room???

ou48A
12-17-2012, 11:43 PM
Are we any better prepared for a major snow in central Oklahoma than we were in 2009?

Plutonic Panda
12-18-2012, 01:57 AM
Are we any better prepared for a major snow in central Oklahoma than we were in 2009?If you ask that question again in 2045 the answer miiiiiiiiiiight be yes.

ou48A
12-18-2012, 08:34 AM
If you ask that question again in 2045 the answer miiiiiiiiiiight be yes.

And how much money will we have cost our self’s by not being better prepared?

Buffalo Bill
12-18-2012, 12:32 PM
Personally I had no problems at all getting around in 2009. Came out after Christmas and all the Interstates were plowed. All the snow routes in OKC were plowed. No problems for me.

ou48A
12-18-2012, 03:49 PM
Personally I had no problems at all getting around in 2009. Came out after Christmas and all the Interstates were plowed. All the snow routes in OKC were plowed. No problems for me.



In 2009 it was a considerable amount of time before all the OKC snow routes had been plowed well and even after that it was even longer before a lot of people were able to drive to a snow route.

We had to hand dig our driveways and part of our street just so we could drive to a plowed rout.
We had high clearance 4WD’s getting stuck in front of my house.

Hawk405359
12-18-2012, 03:59 PM
2009 wasn't exactly the norm though. We can't use that as a measuring stick for what we should expect every year. OKC gets severe snow storms so infrequently that the issue of whether to use money on new plows or supplies or whether to use it on other street repairs that are needed. I don't know if it's really necessary to beef up our armament when it's something we deal with so infrequently here. Most of the time, when snow falls, it's melted a half day later at the most.

As far as the economic hit, I'd be interested to see whether it was actually a hit, or whether the money that would have been spent in retail instead got shifted to hardware.